Obama: U.S., Germany united on Ukraine

CarolE. Lee

WASHINGTON--President Barack Obama and German Chancellor Angela Merkel warned on Friday that Russia would face tougher sanctions if Moscow disrupts this month's presidential elections in Ukraine, setting a new and more aggressive marker for Western action.

"If Russia continues on its current course, we have a range of tools at our disposal, including sanctions that would target certain sectors of the Russian economy," Mr. Obama said during a news conference at the White House. "And we've been consulting closely with our European and G-7 partners, and we're stepping up our planning."

After a two-hour meeting dominated by discussion of Ukraine, Mr. Obama and Ms. Merkel pointed to the May 25 elections as the next moment that could trigger broader, more punitive sanctions against segments of the Russian economy, such as banking, defense or energy. Ms. Merkel said if destabilization continues, "further sanctions will be unavoidable."

"What we're talking about are sectoral measures," Ms. Merkel said.

Previously, Mr. Obama had only cited a full-scale Russian invasion as a move that would prompt the stronger measures, which are opposed by a range of companies, especially in Europe.

Both leaders left vague the question of how such sanctions would be crafted and said their discussions continue. Neither leader was specific about what kind of Russian actions around the Ukrainian election would trigger such an action.

Mr. Obama said Friday that targeting oil and gas sectors next might be unrealistic, given opposition from within the European Union, but there are other important sectors that could be hit.

"We're confident that we will have a package that will further impact Russia's growth and economy," Mr. Obama said. "Our hope is that we don't have to deploy them."

One possible compromise could be for Germany to receive an exemption of sorts "to mitigate certain economic impacts," a senior administration official said. It is also possible a deal could be reached to find sources other than Russia to meet Germany's energy needs. Russia currently supplies about a third of its oil and natural gas.

European officials said this week that one of the main difficulties in getting the U.S. and Europe in line on sanctions was how to ensure that no one country is disproportionately affected. Sanctions on the financial sector would hurt the U.K. most, energy sanctions would disproportionately ding the Germans, and defense sanctions would hurt the French.

European officials also want to keep some powder dry so they can keep turning up the heat.

Standing together in the Rose Garden, Mr. Obama and Ms. Merkel emphasized points of agreement, saying that the U.S. and Europe have been unified in supporting the Ukrainian government and in imposing costs on Russia. They made little mention of the areas where they diverge.

Germany, with its close economic ties to Moscow and leading role in Europe, is critical to Mr. Obama's effort to build an international coalition to pressure Russian President Vladimir Putin to ease off on Ukraine. U.S. attempts to change Russia's course through sanctions would be severely hampered without Berlin's support.

Ms. Merkel has been a vocal critic of Mr. Putin's actions in Ukraine, and Mr. Obama has relied on her to convey to the Russian leader the economic consequences Moscow would face if he doesn't stand down. She spoke with Mr. Putin on Thursday about pro-Russian separatists taking hostage several military observers in eastern Ukraine, including four Germans.

But Mr. Obama, who has a closer relationship with Ms. Merkel than he does with many other foreign leaders, so far has been unable to convince her to get on board with the kind of tough sanctions the U.S. supports.

Ms. Merkel said a May 12 meeting of EU ministers would provide an opportunity to discuss a range of options, as she underscored the importance of continued cooperation with the U.S.

"The United States of America and the European Union need to act in concert here, and they have done so in the past, and they're going to continue to do so," she said.

Complicating matters is the continuing tension between the U.S. and Germany over revelations from Edward Snowden that the National Security Agency tapped Ms. Merkel's cellphone in the past. The two sides have thus far been unable to come to an agreement over rules of the road for spying among allies.

"Angela Merkel is one of my closest friends on the world stage and somebody whose partnership I deeply value," the president said. "And so it has pained me to see the degree to which the Snowden disclosures have created strains in the relationship."

Mr. Obama said he was committed to a U.S.-German "cyber dialogue" to ensure clarity about U.S. goals and intentions.

Ms. Merkel said the debate about spying had revealed that "we have a few difficulties yet to overcome."

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